Sapiens in $2 billion sale talks with US funds
The deal could value insurer-tech provider at up to $2.2 billion.
Advanced negotiations have taken place over recent days between Israeli software company Sapiens and American investment funds over the acquisition of a controlling stake in the company, at a valuation of $2–$2.2 billion. Sapiens is currently traded at a market capitalization of about $1.5 billion (NIS 5 billion).
The talks are in their final stages, and if the parties finalize details within the next two days, the deal could delay the release of the company’s quarterly reports, currently scheduled for this Wednesday, a senior Sapiens executive told Calcalist. Sapiens is represented by Meitar Law Firm, while the potential buyers are represented by Herzog Fox and Neeman Law Firm.
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Formula CEO Guy Bernstein (left) and Sapiens CEO Roni Al-Dor.
(Photo: Boaz Oppenheim)
The negotiations follow nearly two years of efforts by the Formula Group, which controls 44% of Sapiens, to find a buyer. Other significant shareholders include BlackRock (3%) and Vanguard Group (2.5%). CEO and President Roni Al-Dor owns 1.55% of the company, a stake worth around $30 million at the proposed sale price.
Reports indicate that Sapiens and Formula hired U.S.-based investment bank William Blair early last year to lead the search for a buyer. Although the sale process began earlier, it was put on hold after the October 7 outbreak of the Swords of Iron War.
Formula’s stake in Sapiens is carried on its books at $257 million, while its current market value is $647 million. A sale at the proposed valuation would raise the value of Formula’s holding to over $950 million. Formula also owns public software companies Matrix, Magic, and TSG, as well as private firms Michpal and Zap Group.
In March, Formula announced plans to merge Matrix (48.2% owned) with Magic (46.7% owned). Matrix is valued at NIS 7.7 billion, and Magic at NIS 3.4 billion. Formula’s total portfolio is carried at $744 million, though its market value exceeds $2 billion. The group’s market cap currently stands at $1.7 billion.
Sapiens was part of the TA-35 index until mid-July 2021 and reached its peak market value last October, trading near $40 per share. If the sale is completed, it would be at the highest valuation the company has achieved on the U.S. capital markets. Since October 7, however, the stock has underperformed: while the TA-125 index rose 51% in the past 12 months, Sapiens’ share price fell 30%. The company also has bonds trading at a market value of NIS 70 million.
For Q1 2025, Sapiens posted a net profit of $17.9 million, unchanged from the same period in 2024. Revenue reached $136 million, up 1% year-on-year. Full-year 2024 revenue was $542 million, a 5% increase over 2023’s $514 million.
Sapiens provides software solutions for insurance companies and investment houses managing provident funds, with a recent focus on cloud migration. Its growth strategy centers on acquisitions, especially in the U.S. and Europe. In Q1 2025, it acquired Candela for $22 million and AdvantageGo for $58 million. However, integration challenges have led to a reduced operating profit forecast for 2025, $95 million, down from an earlier $100 million projection.
The current negotiations come amid a broader trend of private equity firms acquiring software companies. Thoma Bravo, known for buying public tech firms and delisting them, has been cited as a possible buyer of Sapiens, having made similar moves with companies like Anaplan ($10.4 billion acquisition) and potentially Verint. Another contender could be Vista Equity Partners, which acquired Duck Creek, a Sapiens competitor, for $1.6 billion in January 2023.
Sapiens has contributed 23% of Formula Group’s cumulative dividend since 2017 and represents 34.5% of the value of its holdings portfolio. This strategic importance, alongside profitability challenges compared to Formula’s other holdings, has driven the sale process.
Formula’s controlling shareholder is Polish holding company Asseco, with CEO Guy Bernstein holding 11% (NIS 676 million in value). Other major shareholders include Israeli institutional investors such as Harel (7.5%), Menora Mivtachim (7%), Clal Insurance (5.4%), Yelin Lapidot (6.4%), Phoenix (7.15%), and Meitav (4.9%). A sale is expected to boost Formula’s value and deliver gains to many of Israel’s largest institutional investors managing long-term public savings.
